Commission authorises the merger of the Italian book-clubs of Mondadori
and Bertelsmann

The European Commission has authorised the merger of the Italian book-club
activities of Mondadori (Italy) and Bertelsmann (Germany) respectively.
Although these companies are the only book-club operators in Italy, there
is strong competition from both existing and potential book distribution
channels such as bookstores, supermarkets and the Internet. The merged
entity will not therefore become dominant on the Italian book retail
markets and thus not impair effective competition there.

Arnoldo Mondadori Editore S.p.A. is one of the larger Italian publishers
and is part of the Fininvest group. It operates book clubs or similar type
of formulas under the names of Club degli Editori, Circolo, Club per Voi
and Junior Club. Bertelsmann AG is the parent company of a German media
group which is active world-wide in the publishing of books and magazines,
in book clubs, in the publishing and distribution of music and records and
in the operation of private television. Bertelsmann has no separate
publishing activity in Italy, where it operates a book club called Euroclub.

The two companies intend to create a new company to operate their Italian
book club activities. The joint venture will recombine the Bertelsmann book
club Euroclub and the Mondadori book club Club degli Editori by taking over
the respective activities and the related assets from the two parents.

The Commission has assessed the impact of the operation on the Italian
market for the retail distribution of consumer books as a whole, but also
on the narrower market of distribution of books through forms of 'distant
selling', i.e. including book clubs, mail order, Internet sales and other
forms of selling via correspondence.

On neither market would the operation lead to the creation or strengthening
of a dominant position. On the market for overall retail sales of consumer
books, the combined market share of Mondadori and Bertelsmann would not
exceed 5%. On the market for distribution via 'distant selling', the
market share would be significantly higher (more than 35%), in part due to
the fact that Bertelsmann and Mondadori are the only book-club operators in
Italy. However, the Commission found that the potential for market entry,
notably of companies selling through the Internet, as well as the
competitive pressure from other sales channels (notably supermarkets), are
such that there is no risk of the creation of a dominant position on this
market either.